I'm I ready to invest into a BRRRR project?

Question

I'm very excited to start my first BRRRR project, but I grew up with know one to teach me important life skills, namely finances. It was only earlier the year that I read "Rich Dad, Poor Dad" and became obsessed with this part of life. I've read several more of Robert kuisaki's books, also David Greens and Brandon Turner (currently reading "The Multifamily Millionaire v. I). I've increased my credit that, I swore I would never touch again, back into the 600s, and increased my W2 paycheck from $3,200 to $5,600 and invested $2,000 into crypto.

I've decided to try my hardest to get my very first property by the end of this year, what do you guys think? Is it possible for me to get in the game, or am I foolish to think I can do it by the end of this year?

Juan V Lopez · Answer

Absolutely you're ready Seth. It's good that you know your financial parameters. My next step would be to connect with a loan officer to see what you pre-qualify for. When you have that number, you can then start to hunt for what you are realistically able to purchase.Another strategy you can take is buying a small multifamily in your area (2-4 units). BRRRR this property and make income off the other unit(s). You'd qualify for a higher loan amount if you acquire a small multifamily since lenders can count up to 75% of the potential rental income as income for you. Wish you the best brother, get it done.

Joseph Beilke · Answer

@Seth Baumgartner Getting into Real Estate investing is like having children, you're really never ready but you figured it out, at least that is what I have been told. LOL. NO KIDS HERE! Anyway, with the current supply issue and inflation on pretty much everything the BRRRR method has too be held to a very strict budget or you will not get the value out of it, if we continue down this Real Estate correction. I see you're in Florida and I think us Florida investors are a little bit more protected from a major crash. We still have low supply on homes, builders are still pumping them out, and people are still moving here and less are moving out. Interest rate have scared a lot of buyers, but the shock will wear off and people will begin buying again, the question is how long will it take and will your BRRRR line up with it. That's impossible to know, but you can protect yourself by making sure you save at every turn and make it sure you buy in a desirable area. @Juan V Lopez talked about multi family, and he's right. I would personally start with a duplex you can rehab. Maybe work a deal with your first tenant that when you finish rehabbing the side you live they move over to it with no rent increase. You swap and then start rehabbing the other side. When it all done and the first lease is up, you increase to market value. The next year you basically live for free because the tenant covers the mortgage while you save and search for your next property.Good LUCK!

Bruce Woodruff · Answer

Of course you can do it by the end of the year! The only caveat is that this is not the best time to be a buyer in some ways (interest rates) but better in others (falling prices).But there are always great deals out there, you just have to look a lot harder. Find those underpriced gems so that the higher interest rates will not hurt so bad......

Christian Ehlers · Answer

It's possible depending on the strategy you want to use to finance it and who will be doing the work on the house you want to buy. The important thing is to continue educating yourself and working on your personal finances, that way you are able to handle the unknown expenses and the ups and downs of real estate. You should continue saving money and trying to increase your income (promotion, new job position etc). I'd talk to a mortgage lender immediately if you are serious about trying to buy a property, so they can tell you what you currently qualify for or what you would need to do to qualify for a loan if you don't already. Best of luck!

Wale Lawal · Answer

@Seth BaumgartnerStart by getting adequate knowledge of real estate and strategies you are planning to apply.Also explore various financing and partnering options.You can start by joining local real estate clubs, attending meetups and connecting with local agents and investors.Do a thorough local market research and analysis. Good Luck!

Andrew Postell · Answer

@Seth Baumgartner thanks for posting! My first investment property was actually in Tallahassee, Florida. Are you "ready"? You will probably never be really "ready" (after doing it for 20+ years I'm still learning) but it's never too early to get started in real estate. Keep in mind that if you don't own your own primary home then it's a lot easier to purchase one than it is to do a BRRRR property. I might suggest to start that way first....but I might be a little biased on it since that's how I started. Anyway, hope all of that makes sense. Feel free to post anything else if you need. Thanks!